INDIANAPOLIS – Would you like a vivid example of how dysfunctional leadership and top-heavy bureaucracy can cripple an inner-city school system?

Just take a good look at Indianapolis Public Schools. The horrifying results speak for themselves.

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Less than 60 percent of IPS students graduate high school on time, third- and eighth-graders score more than 20 percentage points below the state average on math and English tests, and six out of seven of Indiana’s worst schools are within the district.

Those sobering statistics are the impetus behind an encouraging new proposal to remake the district, drafted by education reformers at The Mind Trust, an Indianapolis nonprofit charter school advocacy group.

In the report – “Creating Opportunity Schools, A Bold Plan to Transform Indianapolis Public Schools” – The Mind Trust outlines how excessive and illogical labor spending in the district could be redirected into classrooms, where it belongs.

The report calls for drastic restructuring of the district, including decentralizing of the administration, expanding school choice, and giving high performing schools greater control over their budgets and staffs.

The best part of the report, as far as we see it? “We could do this with current funding … without raising taxes one cent,” it said.

“Generations of skilled leaders and educators have done their best to fix broken urban school systems in Indiana and around the country. Indianapolis has invested tens of millions of dollars in ‘reform.’ Yet our kids are still stuck in a system that produces abysmal results,” the proposal says.

“It would be one thing if it were impossible to deliver excellent education to urban, high-poverty students. But a growing number of schools – in Indianapolis and around the country – are achieving remarkable success with students just like ours.”

The Mind Trust proposal explains how other urban districts are improving through the use of reforms that can be applied to Indianapolis schools, and it centers on a simple concept we’ve championed for years – the amount of money spent is less important than how the money is spent.

The money trail

We at Education Action Group have been closely following the problems at IPS for several years.

We have repeatedly identified the district’s out-of-control labor expenses as a significant source of its problems. That issue has been compounded by the reluctance of the school board and superintendent to do anything about it.

For instance, IPS Superintendent Eugene White has double-talked his way into justifying substantial raises for administrators despite cuts to teaching and safety officer positions, as well as student programs.

Last year, White estimated that 60 percent of teachers in the district’s five worst high schools are ineffective. He laid the blame on building principals, claiming they fail to properly supervise teachers or weed out poor educators.

That assertion seemed contradictory a few weeks later when White approved significant raises for administrators at all five of the district’s worst high schools, paying them all more than $100,000 in 2009-10.

When White was confronted by the media over this question, he sang a different tune.

“All of the administrators who are compensated in our district deserve their salaries. It’s important to stay competitive because you want to get the best people,” he told the IndyChannel.

Through a series of public information requests in recent years, EAG exposed the fact that 251 out of 258 IPS administrators received at least $80,000 in total compensation in 2009-10. Of those, 177 received compensation packages worth at least $100,000.

White makes roughly a quarter million dollars per year in total compensation, including allowances for a vehicle, travel, and other expenses. IPS’ bloated bureaucracy has also contributed to a district cellular phone bill of more than $20,000 per month, according to our past calculations.

That type of irresponsible spending made the following fact in the Mind Trust proposal easier to understand:

“Only 41 cents of every dollar goes to IPS school budgets; the remainder is controlled by a large central administration.”

The Mind Trust believes the money that goes into the central office could be better spent, and so do we. The group’s proposal points out that principals have little say over staffing decisions, curriculum and teacher pay. It also finds that schools aren’t being held sufficiently accountable, and that most parents have few high-quality transfer options for their children.

It all leads to an obvious conclusion: “The system is broken. Much of the best work happens only when talented educators find a way to work around the bureaucracy,” the proposal says.

The group hopes to change that reality by flipping IPS on its head and focusing resources on students and teachers, rather than inefficient administrators and contractual union perks.

The plan

The Mind Trust plan would force the district to spend more money on individual schools through savings that would be achieved by establishing a smaller, more efficient central administration.

The proposal would cut money spent on central administration and the services it controls from a combined $247 million to $41 million. The cuts would correspond to an increase in the amount sent to individual schools from $218.3 million to $406.5 million.

The group argues that individual school administrators should have the freedom to target spending to fit student needs.

“Some might have a longer school day and more enrichment programs. Some might pay their best teachers a lot more. Some might develop more community partnerships with counselors, health clinics, artists, and the like. Some might decide to buy back some services from the central office.

“But it’ll be their choice, not determined by the IPS central office,” according to the proposal.

Reorganized management is another key element in The Mind Trust’s vision for IPS. For years, the city’s residents have watched as school board members rubber-stamped nonsensical plans suggested by White. The group makes a compelling argument for revamping the system entirely, and moving daily management of the district to the mayor’s office.

There would no longer be a superintendent hired by the school board. And the new school board would have five members, with three appointed by the mayor and two by the city-county council.

That approach is inspired by schools in New York City and New Orleans that have drastically improved student learning by increasing autonomy for neighborhood school principals, eliminating bureaucratic barriers and rigid work conditions, and offering more choices for parents.

The Mind Trust also calls for a funding system that would send most of each child’s per-pupil state grant to the school they attend within the Indianapolis district. That direct funding component is particularly important, considering the district’s wasteful spending practices cited in the Mind Trust proposal.

“According to proposed 2012 budget figures, only about 41% of funding will go to schools, much of it available only for specific uses,” the report said. “Schools will receive an average of about $6,600 of the approximately $16,200 IPS will spend on behalf of each student in 2012-13.”

The proposal also addresses the problem of school labor costs, and union collective bargaining agreements that dictate similar pay scales for all teachers, regardless of their effectiveness in the classroom.

“School leaders must spend the vast majority of this funding on salaries, over which they have little or no control because a rigid, district-wide salary schedule determines each staff member’s pay,” the report said. “A school leader who wanted to pay excellent teachers substantially more to keep them in the classroom would not be allowed to do so.”

The group’s plan will undoubtedly be attacked by critics with a vested interest in the status quo, including the state’s politically powerful teachers union and education bureaucrats who depend on the district for their livelihood.

It’s clear that The Mind Trust is focused on something far more important – the livelihood of students.

The biggest question that remains is whether the public is ready to embrace a promising new approach to educating the city’s students, or if self-interested detractors will manage to derail the proposal before it gets off the ground.